Seller requires life estate

2 Replies

A life estate will give the grantee (seller, I assume) the right to live in or otherwise use the property until their death.  At death, possession transfers back to the grantee (the buyer, in this case.)  So, yeah, it causes significant issues.  You (I assume you're the buyer) would own the property but possession would remain with the seller until they die. Because of the limitations put on you by the life estate, you need to buy at a discount vs. the actual value.  How much of a discount is an actuarial calculation, like a life insurance policy.   If they're in poor heath with a poor prognosis, the discount may be small.  If they're young and healthy, it may be quite large.

Ah, interesting. Thanks Jon. I don't yet know about the health of the seller but this could be an interesting exercise even if I don't purchase. Do you advocate actually getting an actuary to develop the estimate for substantiation of the discount or is there a much easier and less costly option to complete the calculation?